Poseidon Principles signatories show they have a long way to go to meet IMO targets
More than two dozen international banks have reported emissions data of their ship finance portfolios in the third Poseidon Principles Annual Disclosure Report, showing the mountain ship financiers have to climb to make progress on their green commitments.
Out of the 28 financial institutions reporting their emissions data this year, just seven banks are aligned with the International Maritime Organization (IMO)’s ambition of reducing greenhouse gas emissions from international shipping by at least 50% by 2050.
The report collates ship emissions data collected by lenders from their clients for their activities in 2021. This data is then compared to a decarbonisation trajectory for the same year to show whether, at that point in time, a ship finance portfolio was compatible with a 50% reduction of emissions by 2050.
The Poseidon Principles are a global framework for assessing and disclosing the climate alignment of financial institutions’ shipping portfolios pioneered in 2019 by Citi, Société Générale, and DNB with the support of the Global Maritime Forum.
Michael Parker, chairman, global shipping, logistics and offshore, Citi, and chair of the Poseidon Principles, “We are on a multi-year journey, but with this data we can see our performance, and support our decision-making with insight. Reducing GHG emissions has become a priority in the maritime industry, including for ship finance. However, ships have a 20+ year lifecycle. It will take time for this trend to be reflected in our portfolios, even with the banks favouring low-carbon projects.”
In September this year, Poseidon Principles signatories upped their own green targets, committing to aligning the framework with the ambition of the Paris Agreement to limit global temperature rise to 1.5 degrees above pre-industrial levels by 2100. The banks will measure their climate alignment against this ambition once a Paris-aligned trajectory or trajectories are identified and officially adopted by the signatories. Such a trajectory or trajectories have not been approved yet and are therefore not included in this year’s report.